Mary Jo Pitzl: Lots going on. Just not very publicly. There's a lot of talks. The governor is still pressing for her desire to have the legislature pass the darn thing. Give her a bill and pass it. The legislature is pushing back against that. Here we're 110 days into the legislative session with no end in sight.

Howard Fischer: The problem is that in some ways the dust-up over the whole abortion thing is undermining that strength and as she tries to reach out to placate that particular group, you have Chad Campbell saying, wait a second, we're not just going to go along with anything. So she's trying to put this Jell-o together and the mold keeps coming apart.

Ted Simons: What is the dust-up?

Mary K. Reinhart: The dustup over the abortion thing started a month or so ago with a letter and legal opinion from a Christian legal organization that Cathi Herrod, with the Center for Arizona Policy, passed on to the governor and said we think that Medicaid expansion subsidizes abortions which is has she has been saying all along, contained in Senate Bill 2800 which the governor signed and was promptly challenged by the ACLU basically says that any dollar for any organization that does family planning even if it doesn't go directly to abortions because federal and state law prohibit that, goes to subsidize abortions. The U.S. district Judge Neil Wake has enjoined that bill. The language that she has up with she hopes will get around that but what Republicans feel even opponents of Medicaid expansion think it's just cover. Just really I think Senator Ward actually was talking to me, just pulling the wool over people's eyes if they think this language is going to do anything. It's just political cover for people who want to vote for Medicaid expansion. Republicans on the fence who otherwise might have some trouble if Cathi Herrod is saying this is an anti-life bill.

Mary Jo Pitzl: The plan is to take this language and say we're in the going to use this money for abortion. We'll put it in a separate bill and have people are vote on that. The Democrats can vote against it because we know they don’t like that, but then they can still vote for Medicaid expansion. That's what Mary K. says, it's meaningless cover.

Howard Fischer: The meaningless cover becomes -- look. How many years have we been covering the legislature? So much meaningless cover is what buys the votes sometimes. That becomes the issue. You have folks in the middle. Kelly Ward is not going to vote for Medicaid expansion. She stood out on the lawn and said Medicaid is substandard care, which is pretty interesting since it's managed care the same kind of insurance that probably most of us have. But the question becomes those folks in the middle, those Paul Boyar’s of the world and other moderate Republicans who are afraid of Cathi Herrod, afraid of the Center for Arizona Policy, are scared if they are seen as a pro-choice vote that's going to hurt them in a primary.

Mary K. Reinhart: Really at the core of this it's just sausage making. It goes on every single year at the legislature and every legislature in the country and always has. What do I need to get these guys on board without these guys falling off. The Democrats say you better not be playing games with Medicaid expansion. We have been behind you 100% all session long and you need all of our votes, not just some of them. They have a pretty big chit in this whole thing.

Ted Simons: With that in mind how likely that we would see a separate bill?

Mary Jo Pitzl: Well, the governor's office says they believe they have to have it to make this thing go. So probably very likely. My point about it being meaningless, you're right, it's all vote trading. But at the end of the day will it make it a difference? And people say no.

Ted Simons: Why would this not have legal problems on its own?

Howard Fischer: Oh, well, the bill that was signed last year and enjoined said if you -- Medicaid covers family planning. The bill that was passed said if you also provide abortion services you can't get family planning money. What the judge said is federal law says you can't tie that. This bill simply says no money for family planning can be used to subsidize abortions but then it has this provision in there of what any sort of subsidy means directly, indirectly, lighting, utilities, and directly mandates that ACCCHS audits the books of anybody and that gives them the proof they say was lacking last year to prove there's cross subsidization.

Ted Simons: What about emergency lifesaving abortion?

Mary K. Reinhart: That's a concern of some Democrats that this language just deals with expansion funds. It doesn't deal with any money we have already gotten. There's nothing that says save the life of the mother, rape or incest, which is what state and federal law still allow. Dr. Eric Meyer, in the house, says a provider is an emergency room. If a woman comes in and she needs an abortion to save her life under this language we have to choose between do with want to jeopardize our funding or save this woman's life.

Howard Fischer: That's clear. But again it may be there's no language going to satisfy everybody. As Mary Jo said, we'll play at covering the wool over people's eyes and hold our nose and vote for it.

Mary K. Reinhart: Maybe another issue as volcanic as abortion but there will be others. We'll be seeing in the next few weeks other little thorny issues, bills, pieces of language that will raise their heads and say I need this, I need this.

Howard Fischer: The real key is, this is where the governor needs some spine and a backbone, is to say, look, you're in the going to vote for thy anyway. Tell the Kelly Wards of the world, you're not going to vote for this anyway, so I want leadership to do some leading. I can give you the democratic votes. Find me the Republicans and we'll make it happen. At some point the governor needs to say no. So far she's proven with this abortion thing two weeks ago she insisted we weren't going to add abortion to this. An hour it was, well, maybe we will. She needs a spine.

Ted Simons: Okay, so with all that in mind, -- is this going to wind up being referred to the ballot?

Mary Jo Pitzl: It could. If nobody -- the governor is saying no way. President Biggs says no way. This was people are elected to do. We're not sure where the speaker is on this. That is definitely a plan B. We'll say in terms of maybe the governor needs to get a spine, I think she is trying to work the charm, she sent them all a cookie yesterday with a little note urging lawmakers to wrap up work, pointing out it's getting hot outside. Let's just beat the heat. Just sort of a nice subtle way to say let's wrap this up.

Mary K. Reinhart: As soon as you start talking about ballot language you've given up. You're not talking about giving 16 and 31 in the legislature. There's still a feeling they can get those votes. They have them in the Senate. They need to get Andy Tobin where he wants. He may be gettable. If you get him you get a bunch of other folks, it comes to the Senate and you're done.

Ted Simons: After all this, which wonderfully easy, how long before a law says you needed two-thirds, by the way?

Howard Fischer: You may as well count on that. I can foresee whether it's Tom Jenny's group challenging it -- it's an interesting question. The court has essentially said that you can give department heads power to levy fees to cover their costs. We do it at the department of real estate, department of insurance. This is a little different. This is not the Arizona health care cost containment system levying a fee on hospitals to cover access aspirating cost, it covers the expansion plus another 100 million beyond the expansion and the structure of the fee is still to be worked out. This is where it's getting interesting. We had an incident where Scottsdale Healthcare said we don't like the fee but we want to be at the table to make sure it's structured the way we like it. Now, are legislatures ready to give the director of ACCCHS the power to set up a fee in a structure he likes? Hahaha (shakes head).

Mary K. Reinhart: That's part of the language I think we’ll see. If this thing keeps moving there will be some language that puts some audits -- additional audits or oversight on ACCCHS. A gajillion dollars basically in the hands of one state agency, which it's really not but they want more oversight.

Mary Jo Pitzl: This whole debate over is it a tax or not is another argument for sending it to the ballot. Let the voters decide. There's a belief this would have strong public support. Then lawmakers can cover because they can say, I didn't vote for a tax increase. I didn't vote for Medicaid expansion.

Mary K. Reinhart: There can be a lawsuit either way somebody said. If they do force a two-thirds vote, and then just pass that somebody will sue over that. They didn't need it.

Howard Fischer: There's one fact I think needs to be taken. The governor is trying to short circuit it. Can we get continued federal money for childless adults after the ends of the year? The governor said she sent a letter to center for Medicare and Medicaid studies got back an FAQ, used that to say we can't do that. Well, that wasn't a direct answer. It may take the governor physically submitting an application, having that application rejected to prove to those folks you can't do it any other way.

Mary K. Reinhart: That's not a small matter to submit that application. She is not about to do it, right, because she doesn't want it. What Andy Biggs said there are alternative proposals; part of that alternative would be to require ACCCHS to submit that official waiver request.

Ted Simons: All right, so I think we covered that one as far as question go.

Howard Fischer: We beat to death.

Ted Simons: Next week we'll probably go over the same ground again.

Mary Jo Pitzl: What does that tell you about the length of the session?

Ted Simons: It tells me the air conditioner better be working down there. Let's talk about a veto of a bill that makes gold legal, gold and silver legal tender. First what does that mean?

Mary Jo Pitzl: It means you could use under the language of the bill you could have used gold and Silver to pay your debts, to buy stuff. But it was voluntary so there would have been no requirement on merchants or service providers to accept that, but it would have been another form of payment. Grounded in the belief the Fed -- the dollar is not strong, the Federal Reserve is going to collapse and we need some strong currency. Happening even as gold and silver prices have been declining.

Howard Fischer: What's fascinating is, look, if I want to buy something from Mary Jo and she wants to take a gold nugget, a gold ingot, as payment, you can do that now. You do not need state legislation. What the governor found, she saw the rest the story, which is the tax implications. Right now if I buy pork bellies, I buy it here, sell it there, I had to pay capital gains on the difference. This had a provision saying gold and silver bullion and coins are legal tender and are not a commodity therefore investors don't have to pay capital gains. This was a special bill in a lot of ways for gold and silver investors, which I'm sure I don't in fact have the resources for that, this was a special bill and the governor said, if we pass this, no capital gains, less state revenue, why would I do that?

Ted Simons: Will we see something like this again? Is this an Evergreen kind of thing?

Howard Fischer: Along with --

Ted Simons: Exactly.

Howard Fischer: Of course.

Ted Simons: We will see it again.

Ted Simons: Governor did sign a resign to run bill. What is that all about?

Mary Jo Pitzl: This is basically a further erosion of this resign to run law which frankly looks like it all gets winked and nodded at as it is. With the governor's signature if you are not in the last year of your term and you want to run for another office the only way you violate resign to run now would be to actually formally file paperwork to say I am leaving, I'm going to move on and run for governor. So this removes yet another barrier on the resign to run.

Mary K. Reinhart: For years we have had people getting their nominating petitions together.

Ted Simons: Does that mean Ted’s Exploratory Committee Business is going to be going out of business?

Mary K. Reinhart: Yes I think so.

Howard Fischer: Al Melvin said I’m “exploring governor,” he said I'm running but I can't say I'm running because I'm not in the last year of the term. It's been a scam. You can raise money, you can get your petition signatures, you can print up your signs as long as you don't make that magic I am running file the declaration.

Ted Simons: Those exploratory committees are going to be lonely, nothing to do any more.

Ted Simons: The governor also signed a gun buy-back bill. This basically targeted cities, municipalities and their gun buy-back but only municipal run. If you're a private entity you can do your own by-back.

Howard Fischer: I think that’s the point. The argument is if a city comes into possession of an asset you shouldn't be able to destroy the asset. There is something to be said, that gun is worth money and you should use it to pay off the city debts or help police. The argument of the apposed is look, there are families the kid turns a certain age or they find a gun under the kid's bed, they want it destroyed. They don't want it sold. They could sell it now, which is why you bring it to the city knowing what will happen to it. This simply says once it's in the city's possession it has to be sold. As you point out, there's a way around this. You get a nonprofit to go ahead, come up with the money, with the $50 safe way gift cards they have been doing, you can have police officers there to make sure the weapons aren't wanted but as long as they don't come into possession of the city you can take care of it. It was a lot of smoke for something more political than real.

Mary K. Reinhart: The city of Phoenix is hurrying to get a gun buy-back law before –

Ted Simons: And it got quite a response. I mean this got a lot of blow-back.

Mary Jo Pitzl: From the Democrats who oppose this legislation. They tried to make the broader point that here we are in the first legislative session to happen after the shootings in New Town and last summer in Aurora. What's the legislature do but pass another bill as the Democrats view it further loosens control on guns where they would like to see it go the other way.

Howard Fischer: The great line is that Arizona is a state that does more to protect guns from people than people from guns or we have our own Pro-life movement for weapons.

Ted Simons: It's also yet another example of the state telling municipalities what to do.

Mary Jo Pitzl: Eternal debate.

Ted Simons: All right, Tom Horne in the news for a couple of reasons. Start with the Bisbee civil union change there.

Howard Fischer: Bisbee passed an ordinance saying we are going to allow people to register as a civil union. This isn't terribly unusual. Phoenix and Tucson have domestic partner registries. It also says, you can have hospital visits, you can get the family rate at the local pool. Where they went a little over the edge is they also listed some other things that they would like to honor, like inheritance and community property. You can't do that. Those are state laws. Now, the ordinance itself said to the extent allowed by law we will do this. Tom Horne, who has a few other problems decided to beat his chest and say if you do this I'm going to sue you, so they got together, they sat down and said I'll tell you what, you can list these other things that people should do like wills and inheritance and joint tenancy with right of survivorship but you have to list it somewhere else in the law. Essentially it was a win-win. Horne said I got them to back off and Bisbee said we just reworded it.

Ted Simons: Horne look okay after something like this, what do you think?

Mary K. Reinhart: Looked like everybody sat down and talked about stuff and came to a conclusion. For other cities like Tempe who are looking to see how far they can go, this is helpful to know how far the Attorney General will let them go.

Ted Simons: The Attorney General got a lot of heat when he first said I'm going to sue you yet he winds up getting a discussion and Bisbee made a change -- Another incident, Howie, where Tom Horne kind of won but still he's on the plank there.

Howard Fischer: It's a shall we call it a temporary victory. This goes back to the race. Horne was running. Kathleen Wynn was on his committee for his primary. Then for the general formed this business leaders for Arizona, supposed to be an independent campaign committee, which suddenly Tom is running behind at the last minute because the democratic A.G.s are taking out an ad against him. They spent half a million dollars and ran a last minute ad and Horne pulls out a squeaker. The FBI followed him around, his gold Jaguar, the baseball cap, but nothing came out of that. What did come out of that was a belief there was enough contact between Horne and Wynn to suggest they were coordinating. That runs afoul of campaign finance laws which say you can't do that. What happened basically Secretary of State decided, well the law says I refer it to Horne, but that doesn’t make sense, so he refers it to Bill Montgomery. The court said, look, we understand there's a conflict but the law means something. You gotta follow the law. You have to give it to Horne. If he decides he has a conflict and to a certain extent his attorney is admitting that he gets to farm it out. The question is to whom does he farm it out and what happens?

Ted Simons: It's not likely to be a Bill Montgomery.

Howard Fischer: He said over his cold, dead body.

Ted Simons: Montgomery has been told to knock it off by the judge.

Mary Jo Pitzl: I have one question. Must Horne refer it out?

Howard Fischer: Let's put it this way. If he doesn't, I think there will be a state bar complaint against him. That becomes a problem. He clearly has a conflict. The judge said, in fact one of the things that came out during the hearing, he thinks that Horne has 1.5 million in conflicts, which is the amount of the fine, if in fact he's found guilty.

Ted Simons: This is a technicality. This is something that the judge saw as opposed to the merits of the case, how this case was handled. With that in mind, a little bit of a slap there against the Secretary of State, a little slap against the County Attorney. Is Tom Horne a winner this? He said I'm going to do this, he did it, and the judge said, you're right.

Mary K. Reinhart: I think that remains to be seen. If he doesn't refer it out he's going to be a big loser. Certainly there's already this established conflict. But I think it remains to be seen. I think winner is strong.

Ted Simons: It's strong but another example where he says -- here's my point. Secretary of State wants to be governor. You got Tom Horne, who I think wanted to be governor. But does the Secretary of State look bad when a judge says you didn't follow the rules?

Mary Jo Pitzl: I think so. On this, look, Horne won the battle but the war is still going on. It has not been decided.

Howard Fischer: The other piece of it, this is something I'm having a hard time wrapping my head around, which is the longer you drag this on the closer it gets to the 2014 race. He wants to be Attorney General for another four years. You're dragging this on. We have a hearing which is in late May on that hit and run. I don't see anything positive. I think you deal with it. If you think you can win, look, he had not only the theory that, A, there was insufficient evidence that the phone calls didn't prove anything, B, the campaign finance limits are too low and the law is invalid and could have won on that and put it behind you.

Ted Simons: Every aspect of this case, as long as it continues, he stays in the news for reasons he doesn't want to stay in the news.

Mary K. Reinhart: Obviously he thinks he can win. At the end of the day if he does then he has won.

Ted Simons: Then he becomes a winner. [laughter]

Howard Fischer: Even if he legally wins, he can legally -- let's talk hit and run here. He can say I didn't realize I hit the car. Anything else. The damage to the vehicle wasn't that substantial.

Mary K. Reinhart: Come on, government overreach, he was persecuted, all kinds of arguments about how everyone was picking on him.

Howard Fischer: You saw how well that worked for Andy Thomas. I think people understand certain things. What they will remember is hit and run and that he was being followed and was with somebody not his wife.

Mary K. Reinhart: I am not saying it will win in a real election, I say it's better to settle this thing quietly.

Howard Fischer: I'm not sure.

Mary Jo Pitzl: Your obsession on the hit and run, that's not what's at issue in this case.

Ted Simons: It's a public perception. We're trying to pick winners and losers here. See who won and lost.

Howard Fischer: That's our job.

Ted Simons: Sometimes it's difficult to work. Good to have you here. Thanks for joining us.